Kodak Reports 4Q Earnings,Profits Fall with More Weakness Seen
Press release from the issuing company
Cash Flow After Dividends in 4th Quarter Totals $468 Million
ROCHESTER, N.Y.--Jan. 24, 2002--Eastman Kodak Company today reported fourth-quarter earnings on an operational basis that met consensus expectations and said it generated $468 million in cash flow after dividends.
For the fourth quarter:
* Sales totaled $3.359 billion, a decline of 6% from $3.560 billion in the fourth quarter of 2000.
* The company reported a loss of $206 million, or 71 cents per share, compared with net income of $194 million, or 66 cents per share, in the fourth quarter of 2000. Excluding after-tax charges totaling $262 million, or 90 cents per share, for a previously announced restructuring and other non-recurring items, and an income tax benefit of $20 million, or 7 cents per share, earnings for the fourth quarter of 2001 were $36 million, or 12 cents per share. Excluding a 2-cent per share charge related to the exit of a manufacturing facility, earnings in the fourth quarter of 2000 were $200 million, or 68 cents per share.
"Our strategy during this difficult economic year has been to strengthen our balance sheet so that the company will be in a better financial position once the recovery begins,'' said Daniel A. Carp, Chairman and CEO. "We delivered on our commitment to reduce debt, inventories, receivables and capital spending, while maintaining our strong full-year market share and investing nearly $800 million in research and development. Our cash performance in 2001 was exceptional - an increase of $740 million in cash flow after dividends despite a poor economy.
"In 2002, we will further improve our financial position, and we expect another year of positive cash flow after dividends,'' Carp said. "We also will continue to aggressively manage costs so that as we move into the second half of 2002, profit margins and earnings will improve.''
Kodak also adopted in the fourth quarter a new financial reporting structure, consistent with the new operating model announced in mid-November. The segment results for the fourth quarter, on an operational basis, are as follows:
* Photography segment sales totaled $2.378 billion, down 8%. Earnings from operations for the segment were $59 million, down from $190 million a year ago. The Photography segment includes Consumer Imaging, elements of Kodak Professional, Digital & Applied Imaging and Entertainment Imaging.
* Health Imaging sales were $570 million, down 3%. Earnings from operations for the segment were $66 million, down from $131 million a year ago.
* Commercial Imaging sales were $386 million, up 5%. Earnings from operations were $37 million, down from $45 million. The Commercial Imaging segment includes Commercial & Government Systems, Document Imaging, Graphics, and Wide-Format Inkjet.
* Other Imaging segment sales were $25 million, up 19%. Earnings from operations declined by $44 million primarily as a result of increased investments related to Kodak Display business, earnings declines in Kodak's sensor business and the impact of corporate adjustments. The Other Imaging segment includes the Kodak Display business, Sensors, and Optics, as well as miscellaneous businesses.
* For the year, sales were $13.234 billion, down 5% compared with $13.994 billion in 2000. Excluding portfolio adjustments and the negative impact of currency, sales were down 4% compared with a year ago.
* Net earnings for the year totaled $76 million, or 26 cents a share, compared with $1.407 billion, or $4.59 per share, in2000. Excluding after-tax charges totaling $594 million, earnings in 2001 were $670 million, or $2.30 per share. Excluding after-tax charges totaling $33 million, or 11 cents per share, earnings in 2000 were $1.440 billion, or $4.70 per share.
* Kodak expects that economic weakness will continue to depress earnings in 2002, although this will be offset in part by the benefit of cost improvements implemented in 2001. While the current economic climate makes estimating difficult, the company expects that first-quarter 2002 earnings will be in the range of 5 cents to 15 cents per share. The company further expects second-quarter earnings to range from 60 cents to 70 cents per share, with full-year 2002 earnings ranging from $2.00 to $2.60 per share. The full-year forecast includes 45 cents per share associated with the adoption of the FAS 142 accounting standard for goodwill.
"With our stronger financial position, we will be able to build on our marketplace successes in 2001, including the introduction of the EasyShare digital camera system and the creation of the SK Display manufacturing joint venture with Sanyo,'' Carp said. "I am confident that when the economy recovers, the combination of a stronger balance sheet, a leaner cost structure and our proven product innovation will generate increased returns for Kodak shareholders.''
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